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Grey’s anatomy

The new Par regime has been judged, skewered even before its first film opens

Paramount will launch “Mission: Impossible 3” on May 5 and Oliver Stone’s World Trade Center project on Aug. 11.

Any studio would feel a lot of pressure in launching one tentpole produced by and starring Tom Cruise, and another tapping into the nation’s still-raw emotions around 9/11.

But for Par, the stakes are even greater, as these are the first major offerings of a new regime that has found itself under a harsh and relentless microscope for the last 12 months.

Since taking over as chairman of Par last March, Brad Grey and his team have turned the studio upside down. Every move has been dissected in the press. And for all the accomplishments of the new chairman — capping the budget of “M:I3” after tough negotiations with Cruise and snatching DreamWorks from Universal, for instance — he also has also whipped up enough controversy that the studio has been pummeled by rumors and negative publicity.

Paramount is living up to the company’s original slogan: “It’s the best show in town” — though the meaning of that slogan has changed.

“Until the new slate begins to appear, the judgment will still be out as to what’s going on over there on Melrose Avenue,” says Viacom prexy-CEO Tom Freston. “All along, I’ve had a good feeling but it’s been difficult time. The studio has been through a lot of changes — more than probably any company I’ve seen.”

When Freston brought in Grey, he charged the longtime manager and Brillstein-Grey honcho with re-energizing the movie pipeline and revitalizing the Par brand. Half of Grey’s job is now done, with producer deals and talent (behind and in front of the camera) lined up and, crucially, the execs in place.

That includes studio prexy Gail Berman, co-prexies of production Brad Weston and Alli Shearmur and prexy worldwide marketing, distribution and operations Rob Moore.

Grey began March 1, 2005 as chairman of Paramount Pictures which, after a long string of box-office failures, had flipped from being the town’s most stable studio to the most disappointing one.

Seated behind a desk in his corner office on a recent morning, Grey appeared calm and collected, dressed down in a black sweater. He was quietly typing behind a flat screen. Before answering any questions about the studio, Grey, who produced “Charlie and the Chocolate Factory” for Warner Bros. when he was still a manager, had to shoot off an email to Johnny Depp about yet another potential collaboration with Tim Burton, this time for “Sweeney Todd.”

“It’s been a big year for us but I feel great about it and we are in a good place right now,” Grey tells Variety. “So now we will try to make movies that are up to and will fit in the system we have created. We bit off quite a lot but in one year, I felt like we got a lot done and now I feel like we are onto the movies now.”

While Grey seems unflappable, not everyone is comfortable with the harsh scrutiny to which the studio has been subjected lately.

“The huge number of articles that have been written about the new Paramount administration have certainly been a distraction for everyone at the studio,” groans one Par-based producer. “Usually the media waits until a new team’s first slate of films comes out before they’re attacked. The executives at Paramount have been criticized prematurely and unfairly.”

Others maintain that the microscope has a positive effect. “Is it intense? Yes,” says vet producer Sean Daniel, who has offices on the lot and has been based at Par for years. “Is there pressure? Yes. But the studio is matching that with momentum and creativity.”

In some ways, Grey is surpassing his original goal of luring filmmakers. Case in point: Thanks to the acquisition of DreamWorks, he has some of the town’s most prominent figures reporting directly to him, among them DreamWorks founders Steven Spielberg and David Geffen, not to mention the latest addition to the roster, Stacey Snider.

Though Snider’s start date is undetermined, Grey expressed patience in the process of integrating the former Universal Pictures chairman into the Par system. “She is still under contract with Universal and there is no plan to do a settlement. We are fine waiting.”

Grey and Freston insist that DreamWorks will only be delivering four to six live action pics per year to Paramount’s distribution pipeline. That’s in addition to two animated films a year from Jeffrey Katzenberg’s DreamWorks Animation and a dozen or so from the core Par staff.

Grey has also stressed the importance of pics — and the potential revenue stream — from its refurbished specialty division under the leadership of Endeavor-agent-turned-exec John Lesher and his new team. Previously, Paramount Classics focused almost exclusively on acquisitions, but Lesher has already announced a strong slate of original productions from filmmakers with indie cred.

Because the DreamWorks team now has another top exec looming over its production arm, some insiders are asking about the possible fallout. There’s been speculation that production prexy Adam Goodman and other execs who work under him might not be there for long.

One rival production executive says, “Before, Adam had all the power and only had to go to Steven to get his movies made. Now he has another person to answer to. And so do the rest of them.”

However, DreamWorks sources insist that Goodman is staying put. In August 2005, the exec reupped his contract through 2009.

“He’s not going anywhere,” answers one DreamWorks exec. “The mood is cautiously optimistic. (Snider) brings seasoned leadership to the studio. I think she will gel pretty well over here.”

The fireworks began almost immediately upon Grey’s arrival at Par (see timeline).

One year later, the studio is almost unrecognizable from the Par of years past. Grey’s strategy includes five areas of focus: bring in the best talent, build an international distribution team to replace UIP, boost the home entertainment division, overhaul the studio’s specialty division and build on the strength of the Viacom brands in production and promotion.

These changes have been implemented in every area, not only from the names on the doors but also to the paint, furniture and operating systems. “We weren’t in last place for nothing,” says one top executive. “The business systems were outdated. You couldn’t get more than two people on the phone to do a conference call. Even the email was outdated.”

The acquisition of DreamWorks gave Par necessary manpower to make staff changes, building new departments and rebuilding others.

But last month, Par decimated its distribution team by pinkslipping 109 out of 129 employees. Even before that, top brass caught criticism for its handling of the exits of former prexy Donald De Line and distribution prexy Wayne Lewellen.

“I’ve heard those criticisms,” says Freston. “It’s fair to say that things could have come down a little better. When you are dealing with people who have given years of service, you hope that termination happens in a humane way and a respectful way. The intention to do that has been there but a couple of instances didn’t play out perfectly.”

The studio faced other criticism. Rumors about Berman’s exit were rampant, though illogical: Since none of her films had opened yet and since she is generally well liked, why would they think of replacing her?

Similarly, Grey was hit with a New York Times story questioning his association with Anthony Pellicano, the private detective who is the focus of a high-profile federal investigation for alleged wiretapping and conspiracy. The talk has nothing to do with Grey’s current post, but adds another headache and potential distraction.

Freston nevertheless doesn’t appear to be rattled by all these cross currents.

“All the things that we wanted to do involved changes in a lot of people’s lives,” Freston says. “I admire how Brad has kept his cool; his measured approach has been unflappable in the face of what’s happened. I have great confidence in Brad and he’s got a great future at Paramount. He has been a solid and calm force here.”

Freston, Grey and other studio execs are high on the first offerings from the new regime, particularly “Mission: Impossible 3” directed by JJ Abrams. (Even negotiations for that made headlines for Grey in the early days of his job.) DreamWorks Animation’s “Over the Hedge” bows two weeks later, then comes the Jack Black comedy “Nacho Libre” on June 2.

It likely won’t be until Par has a few hits under its belt that the execs who work on Melrose will finally be able to take a deep breath about the state of the “new Paramount.”

“It’s been a tremendous year for us,” Grey says. “We now have systems and people in place all focused on the same goal: attracting the best creators and talent to Paramount to make great movies. We’re being very aggressive and managing the economics in a prudent way. If you look at the last year — the movies, the hires, deals — that’s what we’ve been up to.”

PAR’S NEW REGIME: THE FIRST YEAR

March 1 He assumes role as chairman.

March 2 Grey sets up his first project, “Babel” starring Brad Pitt

March 22 Word spreads that Fox Entertainment prexy Gail Berman is taking over as the top film exec, before Par prexy Donald De Line is officially notified.

April 14 Alli Shearmur is promoted, Brad Weston is expected to join her. Production prexy Karen Rosenfelt exits. Tom Jacobson begins talks to segue to a production pact.

April 27 Studio inks an exclusive distribution deal with Marvel.

June 7 After several tough days of negotiations and budget trims, Grey greenlights “Mission: Impossible 3.”

June 22 Grey signs Plan B — founded by Brad Pitt, Grey and Jennifer Aniston — to a three-year first-look pact.

July 12 Rob Friedman exits as vice chair-COO of the motion picture group in a move that begins the restructuring of the marketing and distribution operations

July 14 Grey names Rob Moore president of worldwide marketing, distribution and operations.

July 26 Par signs a producing deal with Kevin Misher, followed in the next few weeks with pacts with Lorenzo Di Bonaventura, while Par and MTV Films pacts with Jamie Foxx.

Nov. 11 Endeavor partner and longtime agent John Lesher exits the tenpercenter biz to become prexy of Paramount’s specialty arm

Dec. 9 Par surprises everyone by buying DreamWorks for an estimated $1.5-1.6 billion

Dec. 27 Distribution prexy Wayne Lewellen is let go after 33 years and replaced by DreamWorks distrib chief Jim Tharp

Feb. 2, 2006 50 employees at DreamWorks are let go and 25 at Par are pinkslipped

Feb. 9 109 domestic distribution employees are pinkslipped

Feb. 26 Universal Pictures chairman Stacey Snider announces she is stepping down to run DreamWorks.

March 10 “Failure to Launch” opens to a better-than-expected $24 million.

May 5 Grey’s first film, “Mission: Impossible 3,” set to bow.